Massachusetts Tax Stamps and Other Costs to Sell a Home

by Bill Gassett on April 2, 2010 · 25 comments

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Massachusetts Tax Stamps and Other Costs to Sell a Home

Clueless man who does not know about Massachusetts tax stamps

One of the things that I have realized over the years while representing Massachusetts home sellers is the fact that many are completely unaware that there is a tax to sell your home!

While it is true that if you live in Massachusetts you come to grips quickly that just about everything gets taxed, sometimes this tax law is forgotten about.

If you have never sold a Massachusetts home before you may also not even realize it exists. This tax on selling a home is known as the Massachusetts tax stamps. In most areas of Massachusetts the tax stamp equals $4.56 per thousand dollars of the sales price of the home.

So for example if you sell your home for $400,000, you would owe the State of Massachusetts $1824.00  ($4.56 x 400). The money paid for the tax stamps is income given to the appropriate registry and is forwarded on to the Commonwealth of Massachusetts Department of Revenue.

While most of my Real Estate sales are in Middlesex, Worcester and Norfolk Counties, it should be noted that in Barnstable County the tax rate is $5.70 per thousand so the cost involved with selling a property is slightly higher. The Dukes and Nantucket Counties also charge an additional 2% of the sales price that gets paid to the local land bank commission.

One of the things I always do with my clients is go over all the costs involved with selling their home or condominium. Nobody likes surprises especially when it will be coming out of their wallet! Besides a Real Estate commission which can vary but is more than likely going to fall between 4% to 6%, the Massachusetts transfer tax (stamp tax) is the largest expense a seller will have to be prepared for.

So what are all the expenses you can expect to have when selling a Massachusetts home?

Attorneys Fees. I am a firm believer that every seller should have legal representation. The expense of having a good lawyer representing your interests is cheap in comparison to dealing with the cost of problems that could crop up without representation. A Real Estate attorney in a home sale can do everything from the review of legal contracts such as the offer form or the standard Massachusetts purchase and sale agreement (P&S) to attending the closing either with you or as power of attorney.

Most buyers are going to have an attorney and they will make changes to the standard P&S. Realtors are prohibited from giving legal advice and should not be relied on to council you on this agreement. You will be putting yourself at risk without a complete understanding of the document. Legal representation can vary quite a bit depending on the scope of the work. As a ball park you can expect to pay anywhere from $300-$1500. Obviously you will be closer to the $300 on a standard purchase and sale review and closer to $1500 if you have a more complex transaction and the lawyer will be attending the closing for you.

Massachusetts Home selling expenses

Massachusetts Title V. The Massachusetts Title V is an expense every seller in Massachusetts has to pay if their property is not serviced by public sewer. It is a state law that a Title V must be completed upon the transfer of Real Estate. You can expect to pay around $800 dollars for a Title V inspection. The cost could become higher if the septic tank or distribution box are in an area that is hard to dig up.

This septic expense would also include the pumping fee. Most of the time the septic system will get pumped at the time of the Title V inspection. Remember that a Title V septic inspection is good for two years. The septic certification can also be extended a third year if you pump the system in all three years.

Smoke Detector and carbon monoxide detector certification. In Massachusetts you must have your smoke and carbon monoxide detectors inspected prior to closing. The inspections are done by the local fire department in the town you are located in. The charge for inspecting the smoke and carbon monoxide detectors is generally around $25-$100. You should be aware that there have been new regulations put in place surrounding Massachusetts smoke detector laws. These news laws could have an impact on the cost of selling your home if you need to install more or new detectors. I would suggest clicking the link to read further on the changes in the law.

Preparing a new deed. In Massachusetts it is the sellers responsibility to have a new deed prepared that gets recorded at the registry. The preparation of a new deed is usually $100-$150 and is done by the attorney representing you or possibly the banks lawyer if you do not have legal representation.

There will also be some small miscellaneous costs for mailing, filing fees etc that will be added to your HUD settlement statement at the closing. These fees include overnight mailing, courier services, wiring expenses, charges for processing mortgage discharges and recording fees for recording various documents at the Registry of Deeds.  The total of these miscellaneous expenses will usually amount to a few hundred dollars.

Real Estate surprises are never fun especially when they involve your money!

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About the author: The above Real Estate information on Massachusetts Tax Stamps and other costs to sell a home was provided by Bill Gassett, a Nationally recognized leader in his field. Bill can be reached via email at billgassett@remaxexec.com or by phone at 508-435-5356. Bill has helped people move in and out of many Metrowest towns for the last 24+ Years.

Thinking of selling your home? I have a passion for Real Estate and love to share my marketing expertise!

I service the following towns in Metrowest MA: Hopkinton, Milford, Upton, Southboro, Westboro, Ashland, Holliston, Mendon, Hopedale, Medway, Franklin, Framingham, Grafton, Northbridge, Shrewsbury, Northboro, Bellingham, Uxbridge, and Douglas.

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